Evening Star Newspaper, February 28, 1922, Page 30

F FEDERAL INCOME AND _ EXCESS: PROFITS TAXES (Copyright, 1922, by Joseph J. Klein. All rights reserved.) (Tax questions should be nddressed to Dr. Klein, fa care of The Star. ol communications must be signed. Dr. Kl inguirers.) B ARTICLE XXXVIL Subdivision (d) (2) of Section 202 was the subject-matter discussed in Yesterday's article. A few words of explanation are probably necessary in order to make the matter cl ' Ordinarily, If a taxpayer sells hi: property for “cash or its equivalent,” . the difference between cost (or March 1, 1913, value, if acquired prior , thereto)—diminished by allowable de- © preciatién—and the selling price con- Stitutes taxable gain or taxable loss. However, if the exchange results recognized.” condition; lined in The conditicns were o terday’s article. pear as sections 214 (12)-and 234 (14) of the law. Under such circumstances the tax- payer wishes frequently to employ the cash received by him In the acquisi- tion of property similar to that orl; nally owned by him. He may do so without treating as taxable gain the €xcess of the amount, of cash received by him over the cost (or March 1, 1913, value, if acquired prior thereto) of the property converted. Under the revenue act of 1918, a similar provision existed. Article 49 of regulations 45 discussed the matter at length. Article 50 previded for the making of application by the tax- payer, on Form 1114, for permission to establish a replacement fund. This fund was to be charged with the amount received in connection with the transfer or loss of property under circumstances similar to those dis- cusgsed in this article. The same fund ‘was to be credited with amounts ex- pended In the replacement of the property transferred -or destroyed. Only unexpended balances were to b ted as taxable inecome, while t! ""cost of the property replaced was to be treated as taking the place of the cost (or March 1, 1913, value, if acquired prior thereto) of the prop- erty transferred or destroyed. The provision of the present law s somewhat more liberal than its pre- decessor, in that it permits a similar deferment of the determination of gain even .if the cash or equivalent received upon the transfer or other voonversion of the property in ques- tion is expended “in the acquisition of 80 percentum or more of the stock or shares of a corporation owning" or related property. those promulgated under the early act. NS AND ANSWERS. Q. (123)—Will you kindly answer the followin, (a) Having purchased a new auto- mobile last summer, would the 5 per cent federal tax I was required to pay over and above the list price of the car be a deductible item under the schedule of “taxes pald’ (b) What would you consider a fair amount to charge off for depreciation on a two-story brick building rent- ing for stores, offices and living apartments? Building not modern, about thirty-five years old; cost pres- ent owner $35,000 about ten years ago; value today about §50,000. ‘A —(a) No. (See answer to Q. 141 in next Thursday’s issue. (b) I canmot tell from your descrip- tion. From 2 per cent to 4 per cent on cost (for March 1, 1913, value, if acquired prior thereto) of buflding ](not of 1and and building). Q. (124)—I am a widow and have four children. Two are working, one twenty-one, the other eighteen. g0 to school, one sixteen, the other fourteen. The boys working sup BY JAMES ALLERTON. Bpectal Dispated to The Star. X NEW YORK, February 28.—Hectic activity is absent from the markets and industries of this district this ‘week. Retail buyers now ere com- pleting their purchases for spring and these have been of fair volume. ‘Wholesalers and retailers will be well matisfled if these purchases are fol- Jowed by the expected reorders. Pro- duction in many plants is being con- fined to goods of moderate price. Tex- tile manufacturers are well ocoupled 4n many instances, but declare that they are operating on the thinnest possible margin of profits. Prices of building materials have mot changed materially but are far fmore stable. Increased activity is ex- within two weeks, when the mally open. More bricks have n shipped into this district by rail this winter than ever before. Lumber de- mand Is increasing and is expected to reach normal shortly. There is plenty of cement to meet the spring rush, but makers are preparing for & brisk season. ‘The sales of automobiles showed a decided increase this month.. Many dealers are stocking fairly heavily in expectation of increased business, and this is most apparent in the country districts, where dealers have not been carrying cars In their showrooms. Demand for light trucks has. been &ood. Steel Indications Point to Steadily Growing Output BY H. B. LAUFMAN. Special Dispatch to The Star. - PITTSBURGH, February 28.—Steel, the most important industry in the Pittsburgh district, shows a pro- INANCIAL. Two | POSSIBLE MARGIN OF PROFITS Producers in New York Area ‘Reported Confining Activity to Goods of Mod- erate Prices—Elsewhere. Staple lines of sole leather and uzw [ leather are in poor demand. y New nd tanners are working at.or.under 50 per cent of capacity. Automebiles. JACKSON, Mich, February -28 (Special).—The locai automobile and ®ccessory plants - increased working forces by three hundred workers this week. - ‘To recel: eln’'s’ answers will . not Teveal: the Cottoas. PAWTUCKET, R. 1, February 28 (Spécial).—A few of the mills here have regpened for the .bemefit of those workers who wish to return unger the 20 per cent cut in wages and the fifty-four hour week against which operatives have satruck. It is belleved the workers will return gradually, as the mills are being guarded by state troops. Woel. . _BOSTON, February 28 (Special).— ‘Woolen cloth seems in poor demand for the moment, but raw_wool prices, which have risen from 50 to 60 per cent for medium wools and from 36 to 40 for fine wools in the last ‘three months, still are firm. Prices of men’s clothing are high and this tending to curtail purchases partment stores and operations of manufactur: port us. How shall we make out the income tax report? | A. Each of the two boys who work | must file a report. if his income is $1,000 or over. However, the older boy may make claim as héad of fam- ily to 32,500 exemption (assuming that his net Income is not over $5,000). In_addition, the boys should -divide three exemptions of $400 each pald between themselves, i $300 . for one and $4(9 for the oth: ! Q. (125)—Kindly advise me as to | the following point in my- income tax i return for 1921: Early in the year I bought & used utomobile for $650, which I used for Noar the end of the year it was identified by the police as a stolen . taken from me and eventuaHy turned over to an insurance company. The man from whom I purchased the car is not willing to I'apl:’ me any | part of my money. and if T should re- sort to a civil sult T would receive a judgment upon which I could collect nothing, as he has no property of cash which can be attached. Can'the $850 or the market value of the car at present—namely, $450—be deduct- ed from my taxabie income for the year? 3 |” A. $450 may be deducted, In my opinfon. Q (126)—Could you please enlight- en_me on this question re income tax? 1 am English, my wife and child in England. How am I'classed regard- ing income—as a single or married i manp | A 'Single. Entitled to $1.400 ex- ! Q. (137)—I would appreciate your |advising me on the following two questions: g8 (a) I am single, but the sole sup- port of an aged and Infirm father, who is still in Europe. I hold affi- davits 'and receipts covering the amounts.1 send him for his support. | T own no property and live alone in a furnished room. Can I claim $2.000 land $2,500 exemption in my federal | tax return? | (b) During 1921 I receiyed $100 state (soldier) bonus. Must this be ! included in my income? A. (a) I do not believe you are the head of a family. You are entitled to an exemption of $1,400. (b) No. ;i Q. (128)—W1ll you kindly advise me as_to the following? 1 am single, employed in 'War D partment and contribute to the s port of m¥‘ father and mother, who reside in New York city—my legal residence. My father is about sixty- five years of age and is uhable to earn any income. Can I consider my- self the head of the family, even though Indy (ll‘h;l' is living ‘:‘d I dg not reside with my parents, an thereby. be allowed a deduction of |ERVEIS river. Fourteen coke plants 35:532&3.’. :.;n‘}“;hax;lym;nt!l_!:;:r':n: number available being about 10.000. et — A. I believe you are the head of In the Heart of the the family, If you are the main sup- | port of your pasents, and entitied to National Capital—de- sirable office rooms in $3,300 (it your net the conveniently lo- Clothing. DETROIT, February 28 (Special).— One of the largest dealers in men’ clothing here reported today thaf hi February ' business has been the largest of any February since 1914. Olives. NEW_ YORK, February 28 (Spe- ‘clal).—There is a Continged demand here for Spanish olives, and prices are showing some advances. Cement. SAN FRANCISCO, February 28 (Special).—Mille making cement in this section are marking prices. There isan incr mand. Shoes. LYNN, Mass., February 28 (Special) -The Lynn Shoe Manufacturers' A sociation is comsidering the possib! ity of making Lyna an open-shop town. A majority of the employers have pledged themselves not to enter an agreement with the unions unless & 20 per cent wage cut Is accepted. = Machinery. 'HILADELPHIA, February 28 (Spe- clal). — The dwin Locomotive plants _are ope: about 30 per cent of capacity. . Ceal and Coke. SCOTTDALE, Pa., February 28 (Special).—The H. C. Frick Coke Company fired an additional 700 ovens today, bringing the output of the concern up to about 32 per cent of capacity. . It 1s reported that addi- tional ovens will be fired March 1. BROWNSVILLE, Pa., February 28 (Special).—Coal shipments lr?! creasing at points along the Monon- an exemption of income is less than $5,000). Q. (129)—From section 216 of the revenue act of under “Credits Allowed Individuals,” I quote: “In no case shall the reduction of the per- sonal exemption from $2,500 or $2,000 operate to_increase, thé tax which cated would payable e exemption ¥ % were $2,500 by more than the amount Citizens Savings Bank of the net income in excess of $5.000.’ To how high an amount over $5,000 1336 N. Y. Ave. N.W. would this ruling apply? If a man had a net income of $10,000 what would be his normal taxp' In your reply please explain fully and kindly lgive me an example as to how this would be computed, and is there any {scale by which to b gulded? A. See Article XIX. Heat, light and janitor service. Southern exposure. Moderate rental. Immediate possession. Apply at the BANK International Building FORMERLY INTERSTATE BLDR. 13191321 F St. N.W. A Few Very Detirable Offices Left Reasonable Rents of dollars’ damage to crops, according to agricultural experts, but the smow blanket was worth millions more to the farmers in the molsture assured, which was sorely needed. May wheat 1s up to its high point for nine months and hogs topped the eleven-dollar mark. The temporary snow blockade undoubtedly contributed to the rise in prices of farm products here, but the upward trend has grown more appar- | ent for some time. Bankers and business. men of the Twin Cities assert that the confidenc: of the farmer has been restored, th: he is coming back as a buyer and that the prospects for 1922 have greatly improved in consequence. ‘Thousands of men gained temporary employment in clearing the snow piled up by the storm. holesale mer- chants declare their business is better than it was & year ago, although not quite up to that of normal i:ln. Mall order and house trade tter and retail merchants are aiding sales by heavy advertising. A Income Tax Booklets Northern Pacific railroad officials an- year. . 2—A carefully pre- Commodity Reports {’h'.“’ici" et ; From Various Sections T . Binder Twine, Ry Sompeticion pezween tne in ()| The National City Company - ternational Harvester Company and the Plymouth Cordage Company has resulted in reducing the price of binder twine for 1932 from 4% to 6% cents below the prices which obtain- ed & year 2g0. The present level is copsiderably below that of 1917. Washington—741-15th St. N.W, Telephone Main 3176 Dry Goods. FORT WORTH, February 28 (Spe- cial).—Jobbing houses report collec- tions in west Texas the worst ever known. They attribute this to the recent dry weather. However, heavy rains in the last few days may cause l‘n improvement in business condi- n: nounced recovery this week from the tions. low levels established earlier thl gear. All indications point to stead- ly growing output and higher prices in at least a few products. aders in the industry call attention to the brace taken in basic materials—pig fron and coke—declaring this is in- dicative of the trend of output and prices. Practically every mill is producing at a greater percentage of capacity this week than at any time this year. Liberal demand for steel heets is coming in from many ;owces and higher prices are pre- ‘dicted. o General business also {s moving in larger volume in .the district. Sea- sonal merchandise is somewhat spot- ty, owing to recent sudden chan in weather conditions. Shelves are almost clear of winter clothing and yoerchants are exerting special ef- forts to clear the way for sprini goods. Brighter prospects are ahead in _the glass industry. Window glass sales are larger, bottle demand is in- creasing and road salesmen have turned in a good volume of orders for tableware and glass lighting goods. Heavy Snow Northwest Worth Millions to Farms p BY E. D. JENCKES. Spacial Dispatch to The Btar. = ° - ST. PAUL, February 28.—Farmers and business men of the northwest are smiling today as they through the drifts left by.the worst storm experienced in this section in samy years. -The storm did millions plow |- Fish.' ASTORIA, Ore., February 28 (Spe- cial).—Establishment of refrigerator steamship lines between the north Pacific coast and the United Kingdom is expected to Increase sales of Co- lumbia river fish. Demand for frozen | and pickled salmon is expected to re- sult in large shipments to north Eu- rope. Investors Say. -;thatvthere is ‘nothing com- plicated about” buying our First Mortgages. There is no red tape. It need take no ~more time than purchasing a book at a bookstore. The 'in- .terest starts the day you put down your money—now 7%.: | We always have on hand’ small and large mortgages for sale. They are always worth -exactly the amount you pay for them.. They never de- pteciate. - There is no coni- mission or other expense to be paid by you. 5 N ~In amounts of $250 and wup.- Lumber. . LONDON, February 28 (Special).— Canadian spruce is attracting 'little attention in_this lumber market and pitch pine is in poor request. Prices -rak barely maintained for American oak. Citras Praits. SAN "FRANCISCO, February 138 (Special).—8tate agricultural officials estimate that the loss of oranges by frost will total- 7,000,000 boxes, or about 40 per cent of the expected crop. is has strengtheried the marke NEW_YORK, February 28 (Spe- 11).—Movement . of the foreign n crop into this market is in- There are over 135,000 { Palermo and Messina lemons box Z nflmon. {:r‘-' . this mt. California Mm. Loans Leather, - 1412 Eye Sireet N.W. BOSTON, February 28 (! % o3 s The leather market is very dull, th Main 2100 ° . bright spot- being the demand -for patent and upper leather specisities. thelr| 1406 H St. N.W. ’Money In Any Sum tions connections tocally. and in other cities enable us to tur- nish nwney in any amount for {2843 N. Y. Ave. HINGTON, —~INSURANCE— AR Lines—Expert Service BOSS & PHELPS, Main 4340 ‘Washington Real Estate Ka- Every ortgage is less terprises. o than 50% of the murket value Stone & Fairfax of the preperty. D. O, TUESDAY, The Safess Security on Earth YOU ting thls week at|f “conditions. NEED NOT ll BE A WIZARD Bept. 18300 1378, hl-lo’;:flnp Pl Cifoage Butroit Clavelend_S1. Lovis Ciosinaat!| I L. Rust Finst Mortgage Loanos In Conwenient Denominationo 912 Ffteonth. Stueel L Absolute safety. 2. Reliable 3. Liberal income. - 4. Insurance against Joss. 8. Protection against depre= ciation. 6. Prompt payment of interest. 7. Repayment of principal I Jfull at matarity. Choice First Mortgages $100 $250 $500 WILLIAM S. PHILLIPS Safe Investments = 1409 New York Ave. Finance your plans tfirogh the Lincoln National We will gladly make you a loan on approved collateral or endorsement whether you are a depositor here or Lincoln National Bank 7th & D Streéts N.W. Confidence Ina businegs house is one of its most valued assets, some- thing that is earned only.in a long period of years. Many buyers of FIRST TRUST interest, purchase large amounts of these notes from us, without inquiry or investigation—because they have con- fidence in us. They know that back of every note, in ad- dition to the sterling first mortgage security, there is the sterling honor and integrity of an organization that has reached its present eminence by faithful, conscientious service to a growing clientele over a period of many years, Notes: $100, $250, $500, $1,000 Allan E. Walker & Co., Inc. 813 15th St. N.W.,, Southern Bldg. TES, bearing 7% - Main 2430 % ' L snam.éss& An Investment —that frees you from worry as to safety, annoyance as to collec- tions or other details, and the ne- cessity of follow-up of stock market or business Shannon & Luchs First Trusts On Washington, D. C., Real Estate. Write for Booklet “S.” It's ME FEBRUARY 28, 1922. Co-Operative Amnetn Surplus Systematic Has helj o e 4 o Bey Gy, Our veowrs names plo wl Soas 'to "thid mystem, Subscriptions P. Stocks D. Budd & Co, (established 1885). Write for our particularly good EQUITABLE Association Organized 1870 424 YEAR COMPLETED ple to financial htnmumnnn“l‘:fi-- JOHN JOY EDSON, FRAN] REESIDE, Secy. BIRD&CO. BROKERS Full Service 821 15th Street (Opposite Shoreham) Direct private w Acconnts Carried on Margin FINANCIAL, Sam’s guarantee of protection in this form. Building or your investment. situated at the seat of the government itself. 94,365,396 73 .$1,111,632.98 Saving ever; i % le 4o dnancia 'y day in the year. WAy ma: owe their suc- for the 727 15th Street N.W. Blinn e Washington, D. C. Sk | $2.50 Per Month The Natiow’s Home Toun 4 Per Cent Interest 52 Years Without Loss to an Investor EQUITABLE BUILDING 915 F St. N.W. President $2,000,000.00 Beods Practically One-tenth of ire to Ogden New York letter on a stock. \ .!s-fiNGS BANK $1,000 Life Insur- ance Without Cost WOODBURY BLAIR FRANK W. STONE Ofen at 8:30 AM. Every Banking Day Washington N COLORADO BUILDING | Telephone Main 1603 G.B.Chipman Manager 911 F Street Capital, $250,000.00 Office in bank what's left of your pay. ponl—g’et your paubook THIS pAYDAY.‘ O it et § 1 this convenient Bank A Passport for Your Investmient When an American citizen enters a foreign country, our Government arms him with an official document— assport—permitting him to pass or trivel about in safety. Even if it were not obligatory you would not think of going into other lands without having Uncle And what prompts you to protect yourself against bodily harm or annoyance likewise must prompt you to protect your holdings. A First Mortgage Note 1s a pass- Fort for your savings and is a guarantee of safe travel of It is backed by improved real estate Our First Mortgage Notes should appeal to you be- cause they are safe, offer a liberal return and are at par . Swartzell, Rheem & Hensey Co. Capital and Surplus Speaking, about All the People in the District Are Customers Of This Bank Safe {TWhat better evidence would any one Deposit want of the decided advantages of Boxes ot connection with this time-tried, Moderate soundly managed institution? Rl { Join our growing family of over 41,000 depositors THIS PAY DAY, —_— and let us help YOU up the ladder to financial independence. Over £ Deposits Welcome in Any Améunt. 41,000 OFFICERS Patrons W OODBURY BLALR - Firsi Vice President E,’}gg{é BALRD E-As Rate of DAVID BORNET. “Asst. Trust Officer Interest DIRECTORS Paid on Foolbery Buie Filiam D. Serve Large and Welter G Gloputas Vieter Kaufmana Small William V. Cex Charies ounts Efrant Gin® Zamx wine o National S6th Oldest Savings Depository in Washington Year Cor. 15th and. New York Ave. Columbia National Bank Surplus, $250,000.00 "To Make Real Financial Progress SAVE FIRST---Then Spend 1] That'is, make a goodly addition to your Savings Account EVERY PAYDAY, before you disburse any of your salary. You'll find this practice means a much more flourishing account than just putting {| Our Savings Dept. facilities are at YOUR dis- 8] For peried of commerce and In 1820, the nation was small small. Demand for capital 2:& 1820, the New York Curb Exchangethas aided the dous growth of bers of this Exchany which’ provides maximum And Jones & Baker, nearly 40% of whose new customérs are introduced by i quatters” for New York Curb Ask for booklet showing development of “America’s Second Largest Scock Marke” - were increased as ess. The mem- * ge operate under a constitution. for the public. American busin old customers are “‘in head- Exchange stocks. lgiss&Bm 2 ‘uy—u months 1st and. quarterly Under Established 189 profit-sharing is paid to bondholders. SAFETY © Dividends in 8 Years—819% (FROM THE TREASURER’S REPORT) Total Yield Amousnt of Loans Bond Number Mambie ol = on Par - Zesn Ofiess 809 $130,617.34 6% Paid 1% Paid % 3 3,509 2 91 6% 2% 8% 7 10,708 7 6% 4 5% 1% 11 18,552 1,408.360.62 6% .. 5% - 1% 12 17,692 1.631,277.62 6% 5% 1% 12 328,188 2,857.922.16 $% 5% % u% . 17 28,428 sagAR 6% L 5% % 21 36,259 4610,27453 8% g E No Client Ever Lost House of Hodson ™ Beneficial 6% Debenture Gold Bonds : COUPON aid January 10, to 16 months. _iInterest is ‘ebruary the ereafter—and last of every Address R. M. HARRIS, COR. - Clarence Hodson Official State S_npeg'yision» 13 11th St N.W. SR R. M. HARRIS Clarence Hodson & Company , Bonds for Investment < 513 11th St. N.W. 5% ¢ 1% aDollar Through The Record ef Substantial Growth—Since the incorporation of the parent Beneficial Loan Soclety in , 1913, until December 31, 1921. = - . Denominations, 51,000, $500, $100 - Y Offered With a Bonus of Corresponding PROFIT-SHARING CERTIFICATES . - ¢ haye b 1d. A limited o ST 00000, 2 g 102 DAV TS hant' For turther {nformation mail ! installments coverin| coupon. % i NBMO s.ovvcrvcncasssrssarocsssssasane $20,000 Invested in 1913 Earned $16,200 in - the -0 T hrnevensocon-rovems PeELTA